Ron Buck
As small and large business alike grapple with the changing environment due to COVID-19, there are some existing SBA support mechanisms, as well as some proposed changes, that small business owners should be aware of:
Allison Zorich, CFE with Guidant Financial passed along these options for small businesses needing financial relief:
- “SBA Disaster loans. You can apply for up to $2 million at 3.75% interest fixed for up to 30 years. Determine if you’re eligible here.” [Note, your location may not be on this list yet, but this list is likely to change…]
- “Existing SBA loan. If you have an existing SBA loan, your bank may be able to provide a loan modification to help, including additional capital or deferred payment options. You can contact your lender directly to see what options are available to you.”
You may also want to check out this SBA site: Coronavirus (COVID-19): Small Business Guidance & Loan Resources
Additional proposals being considered include (will report back as these work their way through):
- Increase the 7(a) loan program, which includes the Community Advantage pilot program, authorization level by $50 billion.
- Allow any 7(a) borrower to use the proceeds of the loan for payroll support, including paid sick leave.
- Waive all fees for all 7(a) loans for one year for both lenders and borrowers.
- Provide a 90 percent loan guarantee for all loans, no matter the size.
- Increase the loan limit for SBA Express from $350,000 to $1 million. This program currently provides an accelerated turnaround time of 36 hours for SBA review, and provides a revolving line of credit for small businesses.
- For Economic Injury Disaster Loans (EIDL) made in response to coronavirus not exceeding $350,000, allows SBA to determine repayment ability based solely on an applicant’s credit score, and not require to find that the applicant is unable to obtain credit elsewhere.
- Utilize existing disaster subsidy balance to support any subsidy costs and prevent the need for an appropriation.
